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Credit Facility
3 Months Ended
Dec. 31, 2011
Credit Facility [Abstract]  
Credit Facility

(10) Credit Facility

 

In fiscal 2010, the Company borrowed $18,000 under its credit agreement with U.S. Bank ("old credit agreement"), originally dated October 5, 2007. As of September 30, 2011, the debt was classified as a current liability as the old credit agreement contained a subjective acceleration clause as well as a Company elected arrangement which provided for automatic draws or pay downs on the credit facility on a daily basis after taking into account operating cash needs. As of September 30, 2011, the Company had borrowings of $19,805 outstanding under the old credit agreement. In connection with its acquisition of IZI in November 2011, the Company terminated the old credit agreement.

 

On November 14, 2011, Landauer entered into a five-year syndicated revolving credit agreement with a group of lenders, pursuant to which, the Company has been provided a senior secured reducing revolving credit facility ("new credit agreement") of up to $175,000 plus the ability to increase the line by an additional $25,000. Landauer borrowed $132,887 under the new credit agreement to finance the IZI acquisition, to refinance existing indebtedness and to fund certain fees and expenses associated with the closing of the new credit facility. The new credit agreement will mature on November 14, 2016, and will be secured by a first-priority perfected security interest in substantially all of the tangible and intangible assets of Landauer and its existing and future material domestic subsidiaries, including a pledge of 100% of the stock of each domestic subsidiary and a pledge of 66% of the stock of each first-tier foreign subsidiary.

 

Borrowings under the new credit agreement will bear interest, at Landauer's option, at a rate equal to either (a) the rate per annum for deposits in U.S. Dollars as reflected on the Reuters Screen LIBOR01 as of 11:00 a.m. (London, England time) for the interest period relevant to such borrowing (adjusted for any statutory reserve requirements for Eurocurrency liabilities) plus the applicable margin (the "LIBO Rate") or (b) the greatest of (i) the federal funds rate for the borrowing day plus 0.5%, (ii) the prime rate in effect on the borrowing day and (iii) the LIBO Rate for deposits in dollars for a one month interest period on the borrowing day plus 1.0%, plus the applicable margin. Loans under the new credit agreement may be prepaid at any time without penalty with same-day written notice, subject to, in the case of loans bearing interest on the LIBO Rate, payment of customary breakage costs for prepayments made prior to the last day of the applicable interest period.

The new credit agreement includes limitations on indebtedness, liens, investments and acquisitions, loans and advances, mergers and consolidations, sales of assets, dividends, stock repurchases and other restricted payments. In addition, the new credit agreement requires that Landauer maintain a minimum net worth at all times of $65,000, maintain a maximum leverage ratio ranging between 3.00 to 1.00 and 2.50 to 1.00 as applicable for each fiscal quarter and maintain a minimum fixed charge coverage ratio ranging between 1.15 to 1.00 and 1.35 to 1.00, as applicable for each fiscal quarter. The new credit agreement also includes customary events of default, including but not limited to failure to pay any principal when due or any interest, fees or other amounts within three business days when due, default under any covenant or any agreement in any loan document, cross-default with other debt agreements, bankruptcy and change of control. As of December 31, 2011, the Company was in compliance with the covenants contained in the new credit agreement.

 

The debt is classified as a long-term liability. Subsequent to December 31, 2011, the Company repaid $2,500 of the borrowings under the new credit facility. Based on current business plans and projected operating cash flows, the Company anticipates repayments of borrowings under the new credit agreement within the next twelve months and continued usage of the revolving facility beyond the next twelve months.

 

As of December 31, 2011, the balance outstanding under the Company's new credit agreement was $132,887. Interest expense on the borrowings under the new and old credit facilities for the three months ended December 31, 2011 was $692. The weighted average interest rate for the base and LIBOR rate was 3.263% for the first three months of fiscal 2012. At December 31, 2011 the applicable interest rate for the base and LIBOR rate separately was 5.0% and 3.211% per annum, respectively.